FLASH: Dramatic changes to eBay fees in UK announced

eBay sellers in the US and UK are abuzz with some dramatic changes eBay is making to the eBay fee structure in the UK.  Details are here.

These changes go in effect March first and they are substantial and complex.  I'm still digesting them, but at first pass it looks like eBay is really working on the economics and making some DECREASES (that's not a typo folks) and/or making the fees more performance based.

Here's the highlights:

• For technology products -a  decrease in the FVF (was 3.25 for the £30 and higher), now tiered starting at 3% and going down as low as 2% for higher ASPs.
• For media products - A substantial discount on listing fees (most are 10 pence)! For example, A £15 item used to be a .75 listing fee and now it's .10.  There's a corresponding bump in the FVF from 5.25% to now a whopping 9%.

There are examples in the FAQ - interestingly they show the economics at a 33% conversion rate which is kind of interesting.

Bottom line

Positive: I've felt for 2yrs+ that eBay has to switch to more pay-for-performance by shifting $ from listing fees to FVF or they will continue to lose sellers at an increasing pace.  I'm optimistic that this is a controlled test (UK+cat specific) to see what the impact is and hopefully roll out to the rest of the world.

Negative: US media sellers are ALL OVER this and now see that their UK friends will have an economic advantage AND if you list in the UK and flag that your items ship to the US, your items show up in ebay.com - thus the UK sellers now have a pretty big advantage over the US sellers.  We're seeing requests already for sellers to open UK accounts and prepare to move their inventory in preparation for the change so they can a) have the same economics and b) survive the potential flood in media items this most likely will generate.

Comments

[Red]

Yipee! I might start trading on ebay again as the fees where stifling.....our shipping prices are still sky high and I can get some things shipped cheaper from the states, that I can from the new town along. Madness, but this is the country of the crazies. Amazon in the UK according to the internet retailer magazine had 45% of the Christmas 2006 online market and ebay had 17.5%? Maybe why they decided to hit those categories?

Hmmm we wonder....

[Steve]

The reason why USA seller like myself will now list to UK is simple, UK listings show up on ebay core if seller ticks ships to USA. So Now I can list to ebay UK with intentions of selling to USA customers and not International customers and my ebay fees will be cut by 40%. The sellers from Hong Kong and other Asian countries no this and we be doing it. If US sellers do not counter our sell through rate will go down as there will be more clutter on the US site as a result.

[BILLSTUFF]

I'd rather see them return to the 2-Cent eBay store listing fee for Media items. Most of us who sell records, books and cds have low sell through rates, and prefer to put them in the store and leave them there. I might put up a few more auctions with the lower fees, but who wants to keep relisting those items every 7 days? Right now I have around 40,000 music items and books ready to list, and was planning on doing so until they raised the store fees by 250% to 500%. Now, unless they lower the store fees (and very soon), I'm launching them to my Marketworks storefront.

[Randy T]

The big US media seller, Movie Marz, are certainly celebrating today. They have already been selling on ebay under both a UK and an Australian ebay ID, for well over a year now-the ebay IDs are (moviemars-uk and moviemars-au). This is in addition to their US ebay IDs, (moviemarz, redtagmarket, bookmarz, and others I haven't noticed). Smart guys, it just makes sense that you will now see lots of other DVD and CD sellers located in the US following the strategy...some may just abandon the ebay US portal altogether in favor of selling on the UK version...

[Randy Smythe]

Where were these prices while I was selling? One additional comment Scott: In my reading of the announcement they stated that FP had a 33% conversion rate (taking 3 listings per sale) while Auctions were 50% on average (the original listing, plus the relist).

With the data you have at your disposal is this actually the case? Also, will this cause seller’s in other categories to start selling DVD's, Books and Music only in the UK (Hopefully the titles would be related to their main category) to advertise their main line of product. Inquiring minds want to know. International sales are more profitable at least they were in my case.

[toby]

I'm baffled by the analysis here. As a media seller often listing on .uk I can only see this as a huge fee increase. It looks like an advantage for poor performance as the very low sell rate sellers are the only once who can possibly benefit. Plus making every day a listing a is sure to swamp supply of identical items and lower pricing.

I don't get the part about opening accounts on .uk, anyone can list there now. USA sellers don't have to worry much about a flood of supply as no one on earth can compete with their media shipping rates.

Since I rarely paid more then 10P to list there (everything on promotion days for 10 days or relist unsold ones from those days), this is almost an extra 4% of gross sales in fees while likely creating more competition and lower prices. I doubt I'll list in Europe much anymore.

[Chris]

eBay Ireland has similar pricing structures to to the UK to be introduced on March 1st.

Some more interesting changes on the Spanish eBay site, bye bye to reserves across the board!

Also don't miss the VAT changes across Europe which have effectively given larger business sellers an increase in fees in the UK (and much of Europe).